VENEZUELA: BACK TO THE FUTURE?

Source: http://lammp.org/2016/03/22/venezuela-back-to-the-future/

Wednesday 24th February 2016 marked yet another great leap backwards for environmentalists and the indigenous people of Venezuela. Accompanied by representatives of 150 mining companies from 35 different countries1, including China, Canada and the Republic of Congo, the President of Venezuela, Nicolas Maduro signed a series of agreements that aim to boost mineral extraction in Venezuela, which until recently has been mostly sidelined by the country’s over-reliance on petroleum. Cornered by recent falls in oil prices and soaring foreign debt, Venezuela has hit bankruptcy2 and tapping into its mineral wealth seems to be the only possible way of obtaining cash in the short term.

The mining plans announced towards the end of February are therefore in line with this prospect, seeking to increase the extraction of minerals such as gold, bauxite, coltan and copper over an area of 114,000sq km in the region of the Orinoco belt, at the heart of the country. Gold particularly will receive much attention, as the intention is to propel Venezuela as the second largest gold producer worldwide.

In the first part of this article, LAMMP explores the inherent inconsistency between the government’s ecological rhetoric and its desire to expand mineral extraction projects. In the second part LAMMP looks into the impact that resource extraction activities will have on indigenous communities given the absence of free, prior and informed consultations.

Eco-Socialism: Nowhere Beyond the Political Discourse

As part of his campaigns in the early days of his electoral campaigns in 1998, the late president Hugo Chavez spoke with pride of a sustainable and participatory Bolivarian development model, respectful of the country’s ecosystem. In Chavez’ view, his model offered a radical break from a predatory neo-liberal and capitalist system, where mining policies are both detrimental to the planet and to humanity3 – or so he claimed.

Dubbed “eco-socialism”, the proposed model adopted by Chavez and later by his ideological successor Nicolas Maduro, has moved very little beyond the political discourse. Instead, despite promises to tackle the threats of climate change in particular, the tendency has been to turn backs on environmental issues and push further for an intensive extractivist model, well-known for its devastating impact on the planet.

The decision to develop with (Canadian-based) Gold Reserve Inc. a joint venture to exploit and expand mining activities embodies this legacy of U-turn politics. Throughout 2015 in particular, President Maduro carried out several pledges to take more dramatic action to address the environmental degradation linked to climate change by creating a new ministry of “eco-socialism and water” tasked with protecting the environment in line with the transition towards a 21st Century form of socialism4. Moreover, ahead of the Paris negotiation in December 2015, Venezuela committed to cutting its greenhouse gas emissions by at least 20% by 20305.

Maduro’s latest decision brings to mind two very important questions. First of all, how can the government reconcile its mission to save the planet through eco-socialism with the agreement to exploit the “Las Brisas”, an open-pit mine of very low grade (0.69 grams of gold per tonne and 0.13% copper) located within the Imataca forest reserve in south eastern Venezuela? Given that low-grade ore has less gold, the returns of extraction will be low. The solution is to process greater amounts of ore, which in turn means more damage to a fragile ecosystem, more hard rock waste and greater demand for water and energy at a time when the nation as a whole experiences frequent blackouts.

Some people may argue that the real change is in the government’s position regarding payments for properties that had been expropriated by the late president Chavez. Soon afterGold Reserve Inc lost “Las Brisas”, the company initiated proceedings against Venezuela before the International Centre for Settlements (ICSID) but in those days a euphoric Venezueladismissed compensation in no uncertain terms. Fast track to 2016 and we find that through the Memorandum of Understanding signed with Gold Reserve Inc, Venezuela not only agrees to pay the award (including interest accrued since 2014 plus legal expenses of the company) granted by the ICSID in favour of the company in compensation for losses arising from the expropriation carried out in 2009 but it also reinstates the company as legal owners of 45% of “Las Brisas”. That is not all: in the MOU Venezuela also throws in as a bonus “Las Cristinas”, a much sought-after project with an estimated 17 million ounces of gold.

The question is, given that “Las Cristinas” is considered to be one of the most important copper-gold deposits in Latin America, didn’t Venezuela know that such a deposit is worth far more than mere 5 billion US dollars. Why did Venezuela sign a MOU that is not favourable to the country? The only possible explanation left is that after Venezuela’s efforts to preventGold Reserve from taking steps to enforce payment of the award were unsuccessful, it became painfully clear that Venezuela would have to pay nearly one billion dollars in compensation for the 2009 expropriation. At a time when the country is not able to borrow, where was the money going to come from? What this extraordinary deal with Gold Reserve shows is how desperate the government is for cash.

The “Arco Minero”, a development initiative that undermines Indigenous Peoples’ Rights

Despite an official narrative that promotes indigenous peoples’ rights (Articles 119 and 120 of the National Constitution), the country ratifying the right to free and prior consent for indigenous peoples (protected by the ILO 169 Convention and the UN Declaration on the Rights of IndigenousPeople), no legal provision has been taken to ensure and monitor consultation with indigenous peoples regarding agreements signed in February by Maduro’s government. Decisions have been made to exploit their lands, but communities were neither consulted nor their rights and demarcation of their territories recognised 6.

Dubbed the “axis of development”, the Orinoco Delta, the designated area for the mining projects, is a strategic location for Venezuela; yet it is also the ancestral home of a number of indigenous peoples and communities such as the Warao, Pemon, Karina, Akawaio, and Arawako. For a long time, the Orinoco river was one of the last of the world’s great rivers that was unspoilt by modernisation and development projects, and was considered by its indigenous population as the “father god”7.

This sacred status however seems to be from a past long gone, as the Orinoco Belt is now home to some 250 crude oil fields, and has been a target for illegal miners that have carried out unregulated activities across the territory8. Indigenous peoples in this area have since been greatly exposed to imminent health risks, and have witnessed the rapid deterioration of their ancestral lands9.

Without consultation and Environmental Impact Assessments (EIA) there is no doubt that decisions over natural resource extraction are made in collusion between the state and private companies, with little opportunity for indigenous peoples to protect their livelihoods and survival. Furthermore, indigenous people’s concerns about the presence within their territories of members of the FARC – Colombia’s biggest guerrilla group – with the apparent consent of the government adds a new dimension to their vulnerability, in particular as the FARC is fighting for control of indigenous territories already with heavy presence of illegal miners. For these threatened communities, the new mining agreements reinforce the widespread perception that the economic growth of Venezuela is prioritised over their well-being and their rights, pushing them further into invisibility and social, economic and political exclusion.

The plight of indigenous people is all the more concerning when taking into account the shrinking space for civil society and social movements in Venezuela. Community leaders and human rights defenders face sustained attacks and government-led acts of intimidation as they raise their concerns over the encroachment on their territories. Activists and defenders have repeatedly reported the excessive use of force by national police and military, as well as unlawful killings of protesters and political opponents across the country10. Given the severity of the economic crisis that is tearing the country apart, the indigenous people are currently struggling for survival and their agenda for demarcation and human rights have been put on hold. But how will they react to attempts to evict them from their ancestral territories in order to give way to new mining projects

Finally, although new mining investment is pursued by the government as the solution to a cash-strapped economy, there is doubt about the government’s ability to meet the industry’s demands. At a time when the government is unable to guarantee essential services such as water and electricity, how will the needs of the mining industry for these resources be met?